2016 (2) TMI 344

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....anism and transfer of funds from generation to generation for the benefit of the family members including children and grand children of the settler and protection the family wealth. 2.1. The settler in the year 1978 purchased 500 shares of Glenmark Pharmaceuticals of Rs. 100 each. Bonus shares were issued from time to time and in the month of Nov., 1999 Mr. Loyola Azavedo, the settler became entitled for 1,50,000 shares of the face value of Rs. 10 each. The shares were split into 15,00,000 equity shares of the face value of Rs. 1/- each, out of which 9,96,000 equity shares of the face value of Rs. 1 each were contributed to the trust on 01/10/2008. 2.2. Thus, the corpus of the Appellant Trust consisted of; * Contribution in ....

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....97,010/-(Taxed @ 15% u/s 111A) of the Act. 2.5. The AO determined the total income of the assessee at Rs. 16,89,87,950/- by computing the long Term Capital Gain and short Term Capital Gain aforesaid under the head "Business Income" holding that the assessee had never intended to hold the shares for investment but the motive was to make quick profit, therefore, the transaction is business in nature. 2.6. Aggrieved by the impugned assessment order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) after hearing the appellant/assessee relying upon the decisions of various Benches of the Tribunal and Hon'ble High Courts, allowed the appeal of the assessee. Dissatisfied with the impugned order passed by the Ld. CIT(A), the....

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.... and in order to avoid further risk of loss, 6,96,000 shares of the Glenmark Pharmaceuticals Ltd. were sold by the assessee. As regards short term capital gain, the Ld. Counsel has submitted that the assessee has disclosed the short term capital gain of Rs. 68,96,296/- from the sale of shares held under the different Portfolio Management Scheme. The Ld. Counsel has also relied on the decision of ITAT Mumbai passed in Mr. Bhartan M. Ghia vs. DCIT, ITA 6319/M/10 and cross appeals filed by the Revenue and the assessee ITA No 5397/M/2013 and 5709/Mum/2013 respectively for the assessment year 2010. 4.2. We have heard the rival submissions and also perused the documents on record in the light of the respective contentions of the parties. The c....

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.... investment has no merit. It is quite clear that the over-riding intention of the assessee is not to trade in shares even when the purchase and sale of shares was made through various Portfolio Managers. Therefore the CIT(A) has rightly held the income in question as 'Capital Gains' and not the 'Business Income'. From the aforesaid facts and in view of the settled principles of law it can be concluded that the assessee had purchased/sold the shares in question in the capacity of an investor and not in the capacity of a share trader and therefore, in the present case the income accrued from sale of the shares in question is required to be computed as capital gain and not as business income. 5. In Vinod K Nevatia Vs ACIT, ITA No 6656/M/200....